LILONGWE-(MaraviPost)– Prospects of oil exploration in Lake Malawi remain a controversial issue in the country, with a fresh appeal to President Peter Mutharika not approve the addendum to 30-year agreement, arguing that the deal will Malawi a raw deal and an incoherent fiscal package.
The call comes barely a few months after Malawi government officials resumed negotiations with RAK Gas and Pacific Oil.
The commencement of the negotiations are happening despite the Solicitor General (SG) explicitly advised that the agreement should not be signed and asked more time.
But the former Agriculture Minister George Chaponda who has been leading the negotiations team and Principal Secretary of mining secretly completed and signed the contracts with RAK Gas and Pacific Oil in May 2016.
However, due to pressure from the country’s civil society organizations, including Natural Resources Justice Network (NRJN) and Publish What You Pay (PWYP), the deal has failed to materialize. It requires only President Mutharika to give the nod over the matter.
The call not to approve the oil deal, comes also amid United Nations Education Scientific Commission (UNESCO)’s World Heritage Centre (WHC) warning government of its ambitions to explore oil and gas rages on the Lake Malawi, who say the nation risked to lose its international status on conservation.
In a press statement released and made available to The Maravi Post, dated February 27, 2017, NRJN and PWYP expressed their organisation’s concerns over the negotiation team plans to submit addendum to 30-year agreements for Mutharika to approve and the commencement of oil exploration to begin.
The two environmental watchdogs observed that if oil exploration is successful, the agreements could be in place for thirty years covering exploration, extraction, and closure, with the likelihood of Malawi not benefiting from its proceeds.
The CSOs therefore call for further investigations on how Malawi conducted the oil contracts and signed them despite the SG’s request for more time to investigate the matter.
NRJN and PWYP report that effort to access the agreements formally through the Malawi Extractive Industries Transparency Initiative, (MEITI) multi-stakeholder group, was not successful.
But The Maravi Post has established that the MEITI is in its formulation stage and is currently developing its disclosure roadmap and open data policy regarding the management of the extractive industry, mining, oil, forestry, and gases in the country.
“On 22 December 2014, the Attorney General (AG) was instructed to provide legal advice on whether or not the signed agreements were in the best interests of the people of Malawi and complied with law.
“But the AG appears not to have examined why the contracts were signed days before the election, why the final negotiations were taken out of the hands of the established negotiating team, and whether payments by oil companies to Malawian organizations were in any way linked. Subsequently, the Anti-Corruption Bureau has confirmed an investigation into payments made by oil companies to Malawian organizations around the time that the contracts were signed.
“A few months ago, government officials negotiated a draft addendum revising the fiscal terms for the RAK Gas agreements. Government preparations seem inadequate. Many weaknesses in the existing contracts were not even discussed’, reads the statement and co-signed by NRJN Chair Kossam Munthali and PWYP Chair William Chadza.
Muthali and Chadza observed that the fiscal terms cannot be assessed in isolation citing that they make sense only as a package. The statement further says the terms should be analyzed through an economic model designed specifically for Malawian petroleum potential and Malawian fiscal terms, and benchmarked against peer countries in the region. The statement further argues that there is no evidence that such preparations were made.
“Given the purported irregularities around the initial signing of the contracts, ongoing Anti-Corruption Bureau investigations, the absence of transparency in the renegotiations being led by the Minister of Agriculture, Irrigation and Water Development, the lack of a clear petroleum policy, an updated Petroleum Act, a completed model contract and comprehensive financial modeling, we as NRJN and PWYP Malawi are calling on the President not to approve the addendum until a full public inquiry has been concluded into the current agreements”, urges NRJN and PWYP.
Malawi is also at the same time, on the verge of being blacklisted for failing to meet (UNESCO)’s World Heritage Centre (WHC) deadline submission of the Lake Malawi status report which was slated for February 1, 2017.
The country’s failure for the exercise comes barely eight months after WHC in July 2016 demanded a comprehensive report on its stand for oil exploration in the Lake Malawi.
WHC’s letter dated July 29, 2016 and signed by its Director, Matchild Rossler, who is also the Secretary of the World Heritage Committee (WHC), wrote Malawi’s Charge d’Affaire Joseph Chiteyeye in Belgium, telling him that the 40th Session of the WHC held in Istanbul in 2016, studied the status of conservation of the Lake Malawi National Park as a property of the Centre.
The letter further expressed the WHC concerns over oil exploration activities in the lake and observing that an accidental spill and discharges would pose potential hazard to the entire aquatic life on the Lake and beyond.
But the Minister of Natural Resources, Energy and Mining, Bright Msaka, sounded alarm with the development and he disputed the claims of MALAWI having ignored the WHC letter.
“I have never seen this communication. Therefore, I would like to assure Malawians that nothing bad will happen. We are taking care of the lake not because of it being a World Heritage Centre site but because the lake is Malawian’s treasure. The WHC can’t love the lake more than us.
“Oil exploration will not affect the safety of the lake because there are technologies that are used during such operations to protect the environment”, Msaka said.
Malawi is a signatory to the 1972 World Heritage Convention that seeks to ensure an appropriate and equitable balance between conservation, sustainability and development.
